Reginald Hibbert Boardman v. Minister of National Revenue, [1977] CTC 2293

Roland St-Onge (orally: May 20, 1977):—The appeal of Mr Reginald Hibbert Boardman came before me on May 19, 1977 at the City of Edmonton, Alberta, and it is with respect to his 1972 and 1973 taxation years.

At the hearing the respondent admitted that the appellant was a highly qualified psychiatrist. In 1972 the appellant worked for the Government of Saskatchewan up to the month of August and reported his salary as income up to July 31, 1972. In August 1972 the appellant commenced working for the Province of Alberta at Ponoka as a clinical psychiatrist and reported his salary as income from a business for five months in his 1973 taxation year, that is from August 1, 1972 to January 31, 1973.

The respondent refused to consider the income received after August 1, 1972 as income from a business as a sole proprietorship.

Heard as a witness, the appellant filed two memoranda of agreements as Exhibits A-1 and A-2. He stated that he was not a member of the Public Service and was not allowed medicare or to be a member of an insurance group. As a matter of fact, his rights and obligations are well spelled out in the two agreements filed.

He agrees to perform the duties of a clinical psychiatrist with such powers and duties as may be fixed by the Chief Deputy Minister of the Department of Health and Social Development, such duties to be Supervised by the Director of Clinical Services for the said Department. His monthly salary is $2,666.66 and the term of his employment is for six months. He shall work a minimum of 24 /2 weeks for the term of this agreement, Monday through Friday, at hours in accordance with the Department of Health and Social Development.

When required to perform his duties at the following times, he will be paid $60 per night callback, $70 per day on statutory holidays callback, and $140 per weekend callback.

The appellant will be entitled to 1 /2 days sick leave per month, Cumulative to a maximum of 6 days; 10 days of holidays at full pay. The appellant also agrees that he will not conduct a private practice of psychiatry during the term of the contract.

The Minister of Health agrees to pay subsistence and travelling allowance to the appellant at rates applicable to employees of the Public Service of the Province of Alberta having a classification of Grade 65 or over and to pay the appellant a travelling allowance where a privately owned automobile is used in the course of the performance of service to the Minister, in accordance with the regulations.

The appellant also testified that he has an office in the hospital and used the letterhead of the Department and that he has no extra fee of his own.

Counsel for appellant referred the Board to the following cases: Dr W H Alexander v MNR, [1969] CTC 715; 70 DTC 6006; Isaac v MNR, [1970] Tax ABC 405; 70 DTC 1285; Sim v MNR (No 2), [1966] CTC 383; 66 DTC 5276; Dr R Lefebvre v MNR, 42 Tax ABC 8; 66 DTC 581; Compton v MNR, 39 Tax ABC 139; 65 DTC 578.

Counsel for respondent was able to distinguish between the case at bar and all the cases cited by the appellant. In Compton, the taxpayer had numerous obligations and was not to act as an agent or servant of the employer. In Lefebvre, the taxpayer was paid for each patient and there was no contract of employment for a fixed consideration. In Sim, the taxpayer was free to do whatever he wanted. He gave lectures in various cities and was allowed to claim his travelling expenses. In Isaac, the taxpayer was a self-employed registered nurse; she was hired on a day-to-day basis, had no benefits and was paid only when she worked. In Alexander, the taxpayer was paid by the hospital on a professional services basis, less a 5% deduction for uncollected accounts.

As may be seen, none of these cases apply to the case at bar. According to the evidence adduced, the appellant was paid on a monthly basis, had to work a certain number of hours, was not free to conduct a private practice, and was under the supervision of the Director of Clinical Services.

In addition, the appellant had all the advantages of an employee, namely sick leave, overtime payment, 10 days of holidays at full pay and travelling expenses. All these characteristics do not qualify the appellant to be an independent contractor, but an employee and, consequently, his remuneration for the taxation years 1972 and 1973 is income from an office or employment within the meaning of subsections 5(1) and 9(1) of the Income Tax Act.

For these reasons, the appeal is dismissed.

Appeal dismissed.